Updated 2016: Can I Claim My Foster Child On My Taxes?

Can I Claim My Foster Child On My Taxes?

You’re a new foster parent. You attended the orientation, filled out all of the proper paperwork, went through every inspection process and took all of the appropriate training. You waited longer than expected but finally have a foster child in your home. You’ve found out this new world of fostering is extremely rewarding, and the idea of providing a loving home for a child in need has made your life richer. Your foster child has been in your home for 6 months and tax season is at hand. You have other children and know the steps you need to take to claim them for tax purposes, but what about your foster child? You may be wondering, “Can I claim my foster child on my taxes?” If you meet certain criteria, the answer is yes.

Can I Claim My Foster Child On My Taxes? – Qualifications

In order to answer your question about claiming your foster child on your taxes, there are a few questions you must answer first. Does your child meet the Internal Revenue Services’ (IRS) definition of a foster child? According to the IRS, a foster child is someone who is “placed with you by judgment, court order or an authorized placement agency (state or local government organization).”

Is she under the age of 19 (or 24 if permanently disabled) by the end of the tax year? Has she lived with you for at least 6 months of the specified tax year? You reflect on your journey as a family for the last 6 months and remember the first family trip that she went on – Walt Disney World. You beam inside as you recall how bright her smile was as she took a ride on the Tea Cups, bonded with the Disney family, and, more importantly, connected with your own.

She isn’t old enough to work yet, so you don’t have to worry about her filing a joint return. If she were though, filing a joint return would not be an option if you want to claim her for tax purposes. Her board payment is not considered income she has brought in, so she has not provided more than half of her support for the tax year. Those are considered reimbursements by the state and have no effect on eligibility – so that’s good news.

Your answers line up! Also, your foster child is a U.S. citizen and has a valid Social Security number, so she can be claimed as a dependent on your 2016 taxes, which will bring a reduction to your gross income by $4,050.00.

Can I Claim My Foster Child On My Taxes? – What if I’m Disallowed?

Even though she is living with you, your foster child’s biological parents have the option of claiming her as a dependant. If they choose to, there is a possibility that you would be disallowed. In other words, you would not be able to claim her on your taxes.

If you choose to appeal that decision, you could reach out to the IRS using the contact information they provide upon notifying you of this change. Before reaching out, though, it’s important to gather all supporting evidence that shows your foster child has been placed in your home for over 6 months by your local child welfare agency. In addition to showing proof via monthly board payments, you can request paperwork from your local agency verifying you have been the primary caregiver of your foster child.

Can I Claim My Foster Child On My Taxes? – The More You Know

For in-depth information on how to claim your foster child on your taxes, click here (http://www.irs.gov/pub/irs-pdf/p501.pdf) for the Internal Revenue Service Publication 501, Exemptions, Standard Deduction and Filing Information.

Please note that this is not legal advice. Talk to your tax advisor, visit the IRS’ website at www.IRS.Gov or call them at 800.829.1040 for specific questions regarding claiming your foster child as a dependent.

Author: Salendria Mabrey, FAFS Communication & Development Associate

Salendria Mabrey is a Communication and Development Associate at Foster and Adoptive Family Services.

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32 thoughts on “Updated 2016: Can I Claim My Foster Child On My Taxes?

  1. I have a child that the court has placed with me. Some friends adopted her and her younger twin sisters but could not handle them. We went to court in January 2015 and the judge placed her with me. The adoptive parents send me 600 a month which doesn’t do much. Now they tell me I can not claim her on my taxes and that I have to report the 600 as an income for me. I am having to pull money out of my income to make ends meet since welcoming her into my home. They make no effort to blend her back with their family.

  2. I had 2 children placed in my care by a foster agency. They lived with me for just over 6 and 1/2 months. The mother lived on the streets and her whereabouts were unknown. The father was incarcerated. Parental rights were removed from both biological parents in mid Sept. A family member came forward to adopt them. Can I claim the children on my tax return? They were in my care from Jan. 13th till Aug.4th.

  3. My husband and I took in three children a few years ago. They were not placed by an agency we just took them in because they were living in their car in the middle of winter and I couldn’t allow that to happen right in front of me. We receive no financial assistance from the biological parents nor any state agency. The State of Washington is aware they live here and have come through and made sure the kids are safe and live with us but they still are not in “the system”. They have lived with us for on and off (mostly on) for three years and the only assistance we have gotten for them is the free lunch program through the school because they made them eligible due to their homeless status because our income was too high to be considered…Which is ridiculous. So I believe we can claim the kids as dependents and the biological parents encourage us to claim them… but since they weren’t placed by a state agency we aren’t eligible for Child Tax Credit? Seems unfair when we aren’t asking the state to pay us the foster care support we are entitled to and we are providing 100% support to what were complete strangers who we are not related to and we technically have zero responsibility for. Am I correct? since we took them in out of love instead of having them ripped away from their parents who have fallen on hard times by some government agency we aren’t entitled to credits that others who are getting monthly support from the government for kids they have taken in will get?

    1. It is wonderful that you helped a family in need! However, you are correct that you would not receive financial assistance via tax credit as the children are not in care through Washington’s Child Protection Services. This is because, as per the state, the children are still viewed in the care and custody of the biological parents. Due to this, only the biological parents can claim the children on their taxes as legally they still have rights to the children. The only way you may be able to obtain assistance through a tax credit or other services would be obtaining custody of the children through court. This would be something that you would have to discuss with the biological parents; however if you obtain custody of the children more assistance, financial and otherwise, would be available.

  4. My husband and I are disabled we now have 5 siblings from foster care in which we are about to adopt.my question is will we receive refund from taxes?

  5. We have enough a child who has been plac3d by a state sponsored agency for more than six months. We do not have a social security number for the child, can we still claim her?

  6. So there is the general six month rule, but does that apply in the birth year? My son and daughter-in-law were awarded a three week old infant on July 12, 2016. So the baby was born in late June ( I don’t know the exact date). Baby didn’t live with them for over six months, but did live with them for almost his entire life so far. I don’t know too much about the situation, as they can’t share everything with us, but the birth parents apparently have some drug issues and can’t even have visitations. Does the six month general rule apply here? It doesn’t seem to make sense if it does. I can’t find the exceptions to the general rule…

    Thanks in advance,

    Earl

      1. I think my son found the answer, and I think it’s good news.

        In Pub 501, page 12, foster child is listed in number 1 under Tests To Be a Qualifying Child.

        Number 3 says the child must have lived with you for more than half the year, with footnote number 2 saying there are exceptions, one of which is for children who were born or died during the year.

        On page 14, under Death or birth of a child, it clarifies that the child needs to live with you over half of it’s life during the year.

        The baby lived with our son and daughter-in-law from July 12th on, and he was born in late June. So I think they are good to claim him.

        Earl

  7. I had my niece and nephew that was in foster care I had them for 11 months them they got out in a different home would I be able to claim them for my taxex

  8. Niece’s and nephew lived with me here for four years have custody through CPS father was released from prison a few years ago turn around and claims them this year on taxes they been living with me and my wife the entire to is her able to get away with this what to do

  9. My granddaughter was born on June 7, 2016 and I obtained parental custody of her on Aug 18th, 2016; then permanent custody on Dec 9 2016. I filed my taxes with her on them this year to only have them rejected as someone else claimed her. Does the mother have the right to claim her on her taxes? i have filled out the paperwork to report her for fraud and want to ensure that i can do that. We live in Virginia.

    1. Hi Christi,

      In order to claim someone as a dependent on your tax return, they must be either a Qualifying Child or Qualifying Relative. There are many factors that come in to play in determining whether the children in your specific situation meet these requirements. In general, the custodial parent claims the child for tax purposes. If the court does not make any orders about the tax deduction, then the custodial parent automatically claims the child as a dependent. The IRS income tax rules say that the parent having custody for the greater portion of the calendar year receives the deduction. We hope this helps.

  10. my son was in foster care last year ..6 months and 6 months with me the biological mother for 6 months,,,thats 5 months plus days he was home for visits…who is eligible to claim him? the foster mom has already claimed him without my permission,,is she able to do that lagally?

  11. My grandson was born in December of 2016. I am his foster parent and have been since he was released from the hospital. My daughter was not allowed to come home. I can claim her on my taxes will I be able to claim my grandson as well. We live in illinois.

    1. You can claim a child in placement on your taxes. In order to do this, the IRS requirement is the child would have to live in your home for more than half a year (183 days). I have attached links to the FAFS website and National Foster Parent Association website regarding taxes below that can also assist you with details to any questions that may arise regarding claiming a child.

      https://www.fafsonline.org/foster-adoptive-kinship-parents-federal-income-tax-information/

      http://nfpaonline.org/taxinfo

  12. I i have a big question i receive a letter from the irs in dec of 2015 my daughter always do my taxes last year she did them before i could find out more about the letter i dont no what to do could u please help me

  13. The 183 days does not apply to infants directly discharged from the hospital, they would need to be in care more than half their life.

    Foster Parents need an agency letter stating dates they have been in care, social security numbers which are hard to obtain from caseworkers even though it’s their job, and the return is best paper filed to include the documentation as it can’t be included in e-filing.

    Biological parents sometimes try to claim the children if they have access to their social security numbers. Foster Parents who try to efile, find their return rejected because the bios have filed to claim them. This is why it’s usually easier to paper file with the documentation and your return will not get delayed. Or foster parents can file their normal taxes in any fashion and amend them afterwards.

    Biological parents who falsely claim the tax exemption for their children who are not currently in their care, it’s been stated the IRS goes after them to pay back the monies plus fines, but nothing is ever said they face prosecution for fraud or anything reaches their DCF case file on the ethics of their behavior on this issue.

    1. your response really helped me. I am having a issue as the father claimed the child and he was in our care for the whole 2016 year and he was actually discharged to us. I have called the state and they stated to just submit our placement paperwork tot he IRS we have.

  14. Our grandson was placed with us in January 2016 by the state, mom came back into our home in May after rehab and the state allowed her to live there but we were still the caregivers. We were getting abut $600.00 a month from the state, daycare was $760.00 a month so we paid the difference and got what he needed out of pocket. Dad lives in NJ and has now claimed him on his taxes and have been told by our daughter that they are the parents we are not and they rights were not terminated. I do have placement paperwork that shows the child was placed with us. So do we have the right to claim the child

    1. In order to claim someone as a dependent on your tax return, they must be either a Qualifying Child or Qualifying Relative. There are many factors that come in to play in determining whether the children in your specific situation meet these requirements. In general, the custodial parent claims the child for tax purposes. If the court does not make any orders about the tax deduction, then the custodial parent automatically claims the child as a dependent for tax purposes. The IRS income tax rules say that the parent having custody for the greater portion of the calendar year receives the deduction.

      You can claim a child in placement on your taxes. In order to do this, the IRS requirement is the child would have to live in your home for more than half a year (183 days). I have attached links to the FAFS website and National Foster Parent Association website regarding taxes below that can also assist you with details to any questions that may arise regarding claiming a child.

      https://www.fafsonline.org/foster-adoptive-kinship-parents-federal-income-tax-information/

      http://nfpaonline.org/taxinfo

      1. child has lived in our home for the full year of 2016 and we have been the caregivers for the full year. We are in the state of California and father in NJ

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